Like chasing the fountain of youth, nearly every retiree seems to be searching for the answer to one question:
“How do I add more income to my portfolio?”
We all want the perfect income-popping strategy, don’t we? Maybe in this case we’re looking for that fabled money tree, or the fountain of cash my kids tell me must be attached to my wallet.
Here’s the wrong approach. I call it “Single Product-Based Strategies”
When people talk about adding income to their portfolio (especially with brokers), salespeople naturally turn toward products, bringing you a dog and pony show about “THIS product that would boost your income stream the most!”
This discussion ends nowhere good, and could easily wreak havoc on your portfolio. Take a look:
Here’s the problem: the “which single product is best” approach most often leads to a single asset-heavy portfolio. Under the wrong conditions (like a bad year for the market or for your budget) this mistake sinks your retirement income strategy. If you buy stocks, you don’t want to have to touch them when the market tumbles (and it will).
If you buy real estate you don’t want to be stuck waiting for your property to sell. If you buy bonds you don’t want to harvest them three days before the ex-dividend day to make a house payment.
If you’re worried about income, you want a machine that’ll weather storms, not one that’s built on a single investment type. Let’s get building.